Scott Ludlam

5 December 2013 — The abolition of the Clean Energy Finance Corporation was debated yesterday in the Senate, and found an unlikely supporters in anti-carbon tax Senator John Madigan from the Democratic Labour Party and independent Senator Nick Xenophon.

Senator Madigan said that while he supported getting rid of the carbon tax, the clean energy legislation introduced in the last parliament did have “useful and important initiatives”, and the CEFC was one of these.

“I suggest that abolishing the Clean Energy Finance Corporation is ideologically driven,” he told the Senate. “You do not solve practical problems by ideology.”

Independent Senator Nick Xenophon also opposed the abolition, saying the CEFC’s aim was to “promote fiscally responsible investment in the clean energy sector”.

He pointed to conversations with a range of farmers “distressed as a result of not being able to access finance, despite the fact that they had good businesses”. He noted that Senator Madigan was also concerned about this issue, and that there were parallels with the clean energy industry.

“Abolishing the CEFC, when we know it works and when we have no modelling to suggest any other form of investment would be more effective, I believe is the wrong thing to do,” Mr Xenophon said. “If there is a better, more effective way then we should do that – but, to date, there does not seem to be.

“I strongly believe the government should allow the CEFC to continue.”

Greens Senator Scott Ludlam gave a fiery speech to the Senate on just how ludicrous it was for a conservative government to try to dismantle a clean energy body that is providing a financial return to taxpayers.

Senator Ludlam called out the hypocrisy of a government constantly complaining of red and green tape, but creating its own “brown tape” – “a cynical and systematic attempt to hobble the clean energy technologies that are poised to outcompete 20th century coal and gas interests”, he told the Senate.

“What kind of government takes stock of the collective years of experience of the public sector, bolstered with the kind of private sector expertise that we see within the Clean Energy Finance Corporation, and immediately embarks on a process of mass sackings and redundancies?” Senator Ludlam asked the Senate.

The same sort of men modelling off the “yawning vacuum of imagination” of Western Australia and Queensland’s premiers Colin Barnett and Campbell Newman – “yesterday’s men”.

“How awkward for you to discover in a committee hearing that this entity that you propose to wreck is actually making a financial return to the taxpayer,” Senator Ludlam said. “How exactly does that square with your budget emergency and your desperation to attack the Public Service, cut education spending, cut health spending and abolish public transport funding because you are in such a desperate budget emergency?”

Following is the transcript and video of Senator Ludlam’s speech:

Senator LUDLAM (Western Australia) (10:42):  I rise to oppose this bill in the strongest possible terms. That we are even here debating this bill is an indictment on this government, a government that seems to take perverse pride in its destructive attitude to the renewable energy industry and anything else that might prevent our slide towards climate chaos. What kind of government brings forward as its first act, its highest priority, the dismantling of a functioning carbon price scheme? What kind of government lines up every political and legal weapon that it can muster to attack the Australian clean energy sector? What kind of government takes stock of the collective years of experience of the public sector, bolstered with the kind of private sector expertise that we see within the Clean Energy Finance Corporation, and immediately embarks on a process of mass sackings and redundancies? Well, the same kind of government that we see in Western Australia and in Queensland. We know who has set the template: people like Colin Barnett and Campbell Newman, a yawning vacuum of imagination, yesterday’s men who have somehow deluded themselves into thinking that something as powerful and dangerous as the global climate system can be subordinated for momentary political advantage.

So this is the finest hour of the Abbott regime and is arguably your entire reason for being. Yours is a government that was defined from opposition almost entirely as negative space, an opposition defined by the absence of anything approaching an agenda apart from dismantling the achievements of the last two parliaments. So this is your big moment. This is the moment where you propose to dismantle the Clean Energy Finance Corporation, which will cost the budget something in the order of $200 million a year and crash the renewable energy sector in Australia just as it is finding its strength. What I do not understand is why all of you on that side of the chamber are suddenly looking so shaky. All the bluster has gone out of you. The Liberals put up one speaker yesterday, Senator Abetz, who quickly ran through the same tired talking points that he has been reciting for three years and then sat down.

The rest of the Liberal Party have stayed in their offices and the Nationals have not showed up at all at your moment of triumph, and that is what I am struggling to understand.

Who remembers Tony Abbott’s people’s revolt? Does anybody remember that? It was the anti-environment movement that was meant to rise up. I can remember some revolting placards and a handful of desperately overhyped rallies that ran out of puff after a couple of weeks once Alan Jones’s attention started to wander, but that was it. The people’s revolt—the people rising up against the socialist renewable energy industry and the carbon price—actually never happened.

In one year, the Clean Energy Finance Corporation has already achieved nearly four million tonnes of carbon emissions abatement—more than half of our annual target. For all of the strange financial illiteracy on display on the other side—people calling it a hedge fund or Bob Brown’s bank—this is not a grants organisation and this is not writing out cheques that the Commonwealth does not get back. It is making money for the taxpayer of approximately $2.40 for every tonne of carbon abated. Who knew that you could actually make a financial return to the taxpayer at the same time as eliminating greenhouse gas emissions and creating jobs in the sunrise industries of the 21st century? It is generating a 7.3 per cent return on investment, which is nearly four per cent above the standard government bond rate. It is an entity that is filling the budget vacuum that has been left by your proposals to abolish the carbon price and the mining tax and it attracts just under $3 from the private sector for every dollar that it invests.

How awkward for you to discover in a committee hearing that this entity that you propose to wreck is actually making a financial return to the taxpayer. How exactly does that square with your budget emergency and your desperation to attack the Public Service, cut education spending, cut health spending and abolish public transport funding because you are in such a desperate budget emergency? Yet, at the same time, you line up to kick apart an entity that is making, and intends to make, a $200 million return on the taxpayers’ investment. How awkward for you. How interesting that Senator Abetz in his contribution yesterday, before he scurried back to his office, did not mention the words ‘Clean Energy Finance Corporation’. He ran through the three-word slogans and then he went home. He did not mention that the premise of the bill is to attack and dismantle this entity that is already doing so much to show how we can actually take control of our greenhouse gas emissions.

The CEFC, as others have noted, is one of 14 co-financing institutions around the world that are catalysing and creating huge investment in renewable energy. Bloomberg New Energy Finance believe the investment in one year is upwards of $58 billion in renewable energy and $109 billion in energy efficiency globally. At last we have the Australian parliament and the Australian government doing its bit. As the empty government benches show, maybe you are not quite as proud of this as you might have displayed during the people’s revolt.

Senator Birmingham: There is only one other person on your benches, Senator Ludlam.

Senator LUDLAM: Were you at those rallies, Senator Birmingham, with ‘ditch the witch’, ‘axe the tax’, the people’s revolt and the pitchforks? I am not sure that you were. Senator Birmingham, you are one of the people who I hold in quite high regard on that side of the chamber because I know that you get climate change and renewable energy. I have no idea how you can show your face in here as we contemplate the dismantling of an entity that makes money for the taxpayer while reducing carbon emissions and creating jobs. How on earth do you people sleep at night?

As I said, we know the mentality. What kind of government would do this? A government like that of Premier Barnett in Western Australia. This is a government that is spending upwards of $330 million to resurrect the obsolete and defunct Muja coal-fired power station in Collie. What could you do with $330 million? Why not pump it into a coal-fired power station that our energy grid does not even need? The government unsuccessfully tried to kill off a feed-in tariff into solar voltaics and had to suffer a humiliating backdown when the huge number of people in Western Australia who have installed home PV marched on parliament and demanded that the government uphold its obligations and its contracts.

This is a premier who presides over the Synergy, the energy retailer that passed on the carbon tax to customers in full. People like me, who avail ourselves of the 100 per cent renewable energy product, got a polite letter from Synergy saying, ‘We will be passing on the carbon tax in full; there is nothing you can do about it; you might like to consider withdrawing from the 100 per cent clean energy contract that you have.’ That is the solution that they proposed. At Western Power, all 100 staff in the smart grid division have been cut and all sustainability staff, science educators and outreach staff are being pulled out. There are only two people left in the state bureaucracy with expertise over matters of climate change. They say it is federal issue at the same time as opposing any federal action. That is the template.

My colleague from Queensland, Senator Waters, no doubt has similar experiences inside the Queensland bureaucracy as anybody with the word ‘climate’ or ‘energy’ on their business card is washed out the door after the election. It is systematic and deliberate destruction of expertise within the public sector while you go about crippling private sector activity at the same time. I cannot think of any other explanation. You are not attacking the renewable energy industry because it cannot do the job; you are attacking it because it is doing the job a little too well. If there is another explanation, I would be fascinated to hear it. Just at the point that we are seeing the overtaking of investment in fossil and long-dead investment in nuclear power by investment in renewable energy in global energy markets, along you come to kick the hell out of an entity that is getting the job done here in Australia.

Senator Birmingham: No, you have just outlined that the private sector is starting to take it up.

The ACTING DEPUTY PRESIDENT (Senator Gallacher): Order!

Senator LUDLAM: As you well know, Senator Birmingham, private sector industries such as energy, telecommunications or anything else are supported by the taxpayer. The taxpayer, in the public interest, created the coal-fired power stations that got the disparate colonies of the Australian Commonwealth on their feet a hundred years ago, before the Commonwealth even existed. More recently—taking the Western Australian example—getting the gas industry on its feet in the 1980s took huge public investment in the Dampier to Bunbury Natural Gas Pipeline. These are massive subsidies for industries in the public interest to broaden the energy sector and to reduce our reliance on coal-fired power. Taxpayer-funded investment in new industries is how they get on their feet when they are not mature. That is why you have a feed-in tariff for industries that are expensive, like solar PV. It props them up, and, as they become commercial, you withdraw the subsidies. That is how the German government, through the German Greens in the German parliament, got the German PV industry on its feet.

Now it employs hundreds of thousands of people. It then took the Chinese government, also using strategic public funding, to get economies of scale and now we see solar at grid parity even in countries like Australia.

Under this government, Australia is not open for business. How you create and set up industries such as baseload renewable energy industries—the next generation of technologies coming down the line—is with public support and public assistance. What better way to do it than with a clean energy investment arm—people who understand the particularities of the technology and the risk; people with substantial private sector experience, taking advantage of the low borrowing cost of the Commonwealth, leveraging three dollars for every one they spend and returning a small return to the taxpayer? That, I should say, is what then tops up the ARENA grants funding for research and development. You have people—the start-ups, the innovators, the people taking risks—who need assistance to get on their feet. That is what ARENA does. If you knock over the CEFC, you knock over the mechanism that helps finance ARENA and get things on their feet.

We should also acknowledge that Tony Abbott does not go around talking about climate change as though it is crap anymore, does he? His minders have got to him and said, “You can’t actually call climate change crap. You have to pretend to care. You have to pretend to have a policy, just to sideline it, just to get it out of the way—to get it off the front page and, therefore—

Senator Jacinta Collins:  Neutralise it.

Senator LUDLAM: Neutralise it.’ Exactly, Senator Collins. What better way of doing that than a bucket of money to hand out to your National Party colleagues to go plant trees? ‘We will call that direct action.’ I tell you what, Mr Abbott: if you want direct action, you are going to get it. You are going to get it at the coal terminals in Newcastle. You are going to get it around gas fracking. You are going to get it when farmers lock the gate. If you want direct action, direct action is what you will get. Coming out, then, and saying that this government is open for business in matters of technology and energy investment—while doing everything you can to wreck progress in that sector—belies the fact that this is a government that is setting out to systematically undermine renewable energy technology because it threatens the vested interests of the coal and gas industries which donate so generously to the Liberal and National parties every year. That is why the Nationals take the side of the gas industry over farmers; it is why the Liberal Party takes the side of the oil, gas and coal industries over the new industries we hold in trust to prevent the catastrophic impacts of climate change.

This is not simply a technology debate we are having. This is not an industry policy debate we are having. This is debate about whether, in 40 or 50 years time, we live in a world with two degrees of climate change or whether we are on the path to four degrees. Four degrees will put us into a new geological era. It is the other side of a mass extinction. It means sea level rise and communities having to withdraw from coastlines. It means withering droughts that destroy farming communities permanently. It means, by the end of this century, towns like Kalgoorlie, Darwin and Port Hedland being in climate zones that do not presently exist on the planet. We are not just having a technology debate here. The people who will look back from those future times on the debates occurring in this parliament, over bills like this, will not thank us. They will not appreciate the three-word slogans. They will not have joined the people’s revolt—the one that did not happen.

As it happens, I have had a bit to do with the Clean Energy Finance Corporation in Western Australia. They briefed a meeting, ironically enough, of your stakeholders—the mining industry—in Kalgoorlie earlier this year to explain how the mechanism would work. They said: ‘We are not a grants organisation. We are not here to write out cheques that we won’t see again. We are here to get the industry on its feet.’ And the first people at the front of the queue will be the gold and nickel producers in the goldfields who are looking for some kind of hedge against skyrocketing gas and diesel prices. They are the ones who will build the first iteration of this technology in Western Australia. Not because they are driven by the climate imperative—they are driven by commercial imperatives and they are looking to get technology into the ground that can protect them from rising energy costs. I say to those interests, those mining companies who will be the first ones to build the next generation of this technology: go for it. You have our backing. You have our blessings. If there is anything we can do, inside or outside of this parliament, to make sure those investments are made and those projects are built, the Greens will do it.

We wrote the policy because the state government failed to do so. Having sacked and washed out the entire bureaucracy and the people with expertise in these matters, there was nobody left in the state government to write the renewable energy strategy for Western Australia, so we did it with the help of some consultants, some engineers and some people with experience in the Western Australian energy market. We developed a proposal called Energy 2029 that put the question: could we go 100 per cent renewable on the south-west energy grid of WA? Could we keep the refineries and the chemical industries in Kwinana, keep the lights on and the air conditioners running, and go 100 per cent renewable by the year 2029? That will be the 200th anniversary of the establishment of the Swan River colony and the occupation of south-west Western Australia.. Let’s give ourselves something to celebrate in year 2029 with a 100 per cent renewable energy industry.

But before we put that on the bumper sticker we asked the engineers if it could be done and at what cost. What would be the technology mixes? Where would you build the kit? What would it look like and what would the jobs implications be? Before we put it on the bumper sticker, let us find out if it is possible. So we released a costed technical report in March, outlining two scenarios to reach 100 per cent renewable energy in Western Australia by 2029 and one for ‘Barnett as usual’—one where we just keep on polluting until we have firmly turned the weather against us and business as usual is no longer possible. We showed we can get there for the same cost as business as usual because, by the year 2029, we will have eliminated fuel costs.

That is the key thing I do not think the coalition gets about renewable energy: it is capital intensive and costs very little to run because sunshine is free. Tidal energy is free. The wind is free. That is what you do not get. That is the profound change that our energy networks are in the early stages of going through and they need government assistance to get there. What has never been manifested on that side of the chamber is any sense of urgency about the challenges we face.

We found that construction for the Energy 2029 program would create more than 26,000 new jobs, including 8,000 to 18,000 in solar thermal farms and 2,500 in energy storage. That is three times as many people as are presently employed in the coal, oil and gas extraction industries in Western Australia. If you are serious about jobs—if you really want people to believe you are open for business—then lift your eyes to what is happening in energy markets around the world. We need to catalyse this change in WA.

Renewable energy can be used as another crop in rotation, providing a new and reliable source of income for our farmers. Senator Lines touched on some of these issues before. There are huge potentials in the wheat belt for farmers who are really struggling with changing climate patterns and volatile world markets for their commodities to introduce an energy crop into the rotation. I am speaking in particular of the instance of oil mallee cropping in the Western Australia wheat belt.

The CEFC briefed the goldfields mining interests, the council and the development commission on the possibilities for large-scale solar thermal.

This is the really interesting technology where we can dispose of the notion that when the sun goes down the lights go off. We can now build baseload solar-thermal plants that run 24/7.

Senator Milne and I visited and a utility-scale plant in the south of Spain about this time last year; it had just been running for a full 365-day cycle. It is like a magnifying glass a mile across. It cooks a molten salt solution up to 600 degrees. You bank that for use after dark and you can run steam turbines 24/7 as a baseload plant. A company called SolarReserve is setting up a plant, which they are commissioning this month in the high country of Nevada, that is six times the size of that plant in Spain. They are scouting Australia to open an office here. I have been putting the proposition that they open it in Western Australia because I seriously believe that the goldfields in central Pilbara are the first places in Australia where these stations should be built. My colleague Senator Hanson-Young from South Australia might disagree. I am happy to get in a race with Port Augusta for the first one to be built. I do not mind—we just need to get on the go.

These are the new technologies that do need the kind of support that is being provided by ARENA and the CEFC. The last thing these industries can put up with is the idea that you would pull it apart around them.

We hear a lot in this place and from this government about red tape, green tape and, on a bad day, if you have got Aboriginal interests that you are trying to sideline over land rights, you will tell us about black tape. But this package of bills represents a mass of brown tape—a cynical and systematic attempt to hobble the clean energy technologies that are poised to outcompete 20th century coal and gas interests. Brown tape is what is keeping the Australian economy in the fossil age even as the world moves with determination towards the clean energy age.What kind of government wants to be the first in the world to dismantle a functioning carbon price system? It is the kind of government that has failed the most basic obligation that it owes to its electors—the long term wellbeing, protection and security of its people.

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